Dispelling the Cloud’s Myths

The pace of cloud computing will only accelerate in 2012. The increasing development of information technology, and the intense focus on cost reduction, are highlighting the benefits of moving IT administration off-site. And one cloud computing expert wants CFOs to be aware of the short-term challenges and long-term benefits to organizations.

“Large enterprises must realize cloud computing will not(in all cases) provide immediate cost benefits to their organizations,” Sadagopan (Sada) Singam, global vice president, cloud computing, of HCL Technologies, said in a recent interview. CEOs and CFOs “must understand how cloud computing technologies will drive long-term benefits two to three years following the initial implementation.”

Many organizations look for cloud computing technologies to provide immediate and sustainable cost benefits to drive bottom-line improvements. However, there are a number of implementation and security issues that CFOs must address with their IT departments before a successful cloud migration takes place.

Finance chiefs and their controllers must look at information security measures beyond the minimum standards required by legal and regulatory requirements. “We consider SAS 70 (Statement on Auditing Standards) as a basic standard for cloud computing security efforts,” Singam says. “Companies must recognize the value and importance of their data and ensure they have multiple backups to protect their data and information.”

Cloud computing gives companies of all sizes the opportunity to quickly scale their IT operations, and minimize the fixed costs traditionally associated with major implementation efforts.

However, moving to the cloud does present a unique set of challenges for organizations of all sizes. With many IT departments now reporting to the CFO, cost often becomes the key consideration during cloud implementations. When looking for the right cloud technologies, CFOs must focus on long-term productivity and value to their companies. Cloud computing is more than a passing fad, and companies must make sure they are focused on more than the next quarter’s financial results when making their decisions on the future of their IT operations.

“Hard is soft and soft is hard when considering major changes,” Singam asserts when advising CFOs on the key factors for cloud computing decisions. Organizations must focus on so much more than the hard, short-term costs when identify the right opportunities for their organizational IT.

Coming in part two of this blog: CFOs and their IT directors must understand the importance of hard costs, but they should not forget their employees who will ultimately be impacted by these changes.